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The Japanese Financial Services Agency (FSA) has issued a statement regarding initial coin offerings (ICOs). In addition to risk warnings, the agency detailed how two existing laws may apply to token sales.

Japan’s FSA issued a statement on Friday, articulating its position on initial coin offerings. Essentially they wanted to warn the public on risks when it comes to ICO investments. That public statement is available here: fsa.go.jp

The risks center around price volatility and fraud. Long story short, the FSA warned that you should only risk what you’re willing to loose; try to understand the ICO project at a granular level and conduct as much research as possible. The very real risk exists that the coin could be worthless, as well as the aquisition of ICO Tokens can be extremely risky.

Considering ICOs and cryptocurrency itself are in their infancy, it’s little wonder there isn’t an existing legal framework in Japan (Or anywhere else for that matter) when it comes to ICOs. However, the FSA did proclaim:

ICOs may fall within the scope of the Payment Services Act and/or the Financial Instruments and Exchange Act depending on how they are structured.